Information on Washington's Tax Structure Electronic Funds Transfer by student19

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									     Information on Washington's
     Tax Structure                                                                        W A S H I N G T O N
                                                                                         S T A T E
                                                                                          D E P A R T M E N T
                                                                                            O F




     Electronic Funds Transfer
      PAYMENT OF TAXES BY                               How are Payments Made?
 ELECTRONIC FUNDS TRANSFER (EFT)
                                                        The options for payment by EFT are: Automated
                                                        Clearing House (ACH) Debit, ACH Credit and
                  WHAT IS EFT?                          Fedwire. Fedwire transactions are only accepted
                                                        in emergency situations.
EFT is the transfer of funds initiated by electronic
means. It authorizes a financial institution to debit   In most cases, the Department recommends that
or credit bank accounts. Taxes due on the Com-          businesses use the ACH Debit option. This option
bined Excise Tax Return may be paid by EFT.             provides four ways to initiate the transaction:
                                                        voice, touchtone, terminal, or by electronic filing
Why EFT?                                                (ELF). A comparison of the two ACH options is
                                                        shown on the other side of this publication.
In 1990, the Legislature directed the Department
to implement the EFT program. EFT is less costly
                                                        What is an ACH Debit?
than manual check processing, and is quick and
convenient. It also allows the state to better          An ACH Debit is an electronic transaction in
manage incoming revenue.                                which the business authorizes the Department’s
                                                        financial institution to withdraw funds from the
Who Must Pay By EFT?                                    business’ account and deposit them to the
                                                        Department’s account. The business initiates and
As of January 1992, all businesses that have an
                                                        specifies the amount and date of the withdrawal.
annual tax liability of $240,000 or more must pay
their excise taxes by EFT. The Department will
                                                        What is an ACH Credit?
notify businesses that are required to pay by EFT
at least three months in advance.                       An ACH Credit is an electronic transaction in
                                                        which the business authorizes its financial institu-
Who May Pay By EFT?                                     tion to send funds to the Department’s account.

Businesses may voluntarily pay by EFT after             Whom Do I Contact For Further
contacting the Department and completing an             Information?
authorization form.
                                                        Please contact the Department of Revenue at:
When is Payment Due?
                                                               Taxpayer Account Administration
                                                               PO Box 47476
The funds must be deposited in the Department’s
                                                               Olympia,Washington 98504-7476
account by the first banking day following the tax
return due date. The tax return must still be
                                                        You may also call (360) 902-7170.
mailed by the regular due date. Penalties will be
assessed if payment is not received timely.

APRIL 2001
                    ACH DEBIT                                                 ACH CREDIT


This is What Happens:                                      This is What Happens:

s   Using passwords assigned by the                        s   Before the payment due date, the taxpayer
    Department's bank, the taxpayer calls the                  instructs its bank to originate an ACH Credit to
    ACH network. The call must be made no later                the Department of Revenue's account. The
    than 5:00 p.m. Pacific Time on the last                    funds must be transferred on or before the
    banking day before the payment due date. *                 payment due date. *

s   The taxpayer gives information to the ACH              s   The taxpayer must use a banking convention
    network about the tax payment.                             called a CCD+ addenda record, including the
s   The ACH network gives a verification                       TXP format, to transmit the payment informa-
    number to the taxpayer.                                    tion. Taxpayers should contact their bank
                                                               before choosing the ACH Credit option.
s   The taxpayer mails (unless filing electroni-
    cally) the Combined Excise Tax Return on or            s   The taxpayer mails (unless filing electroni-
    before the return due date.                                cally) the Combined Excise Tax Return on or
                                                               before the return due date.
s   On the transaction's effective date, funds are
    electronically withdrawn from the taxpayer's           s   Funds are electronically withdrawn from the
    bank account and deposited in the Department               taxpayer's bank account and deposited in the
    of Revenue's bank account.                                 Department of Revenue's bank account.
Features:                                                  Features:
s   No additional cost to the taxpayer.                    s   Inexpensive transmission costs.
s   Simple one-step process for the taxpayer.
                                                           s   The ACH Credit transaction may be added to
s   Requires no additional programming or                      the taxpayer's existing ACH payment system.
    special equipment.
                                                           s   The taxpayer maintains and accepts
s   The taxpayer may arrange the transaction
                                                               responsibility for the ACH transaction.
    ahead of time, with the transfer of funds
    occurring on a future date. This is called
                                                           s   The taxpayer assumes responsibility for tracing
    "warehousing."
                                                               errors if they occur.
s   The password assigned by the Department's
    bank provides security to the taxpayer.                *   REFER TO THE EFT DUE DATE FLYER FOR THE
                                                               PAYMENT DUE DATES.
s   Very low error rate.
s   The Department is responsible for tracing
    errors if they occur.

                      To inquire about the availability of this document in an alternate format for the
                      visually impaired, please call (360) 486-2342. Teletype (TTY) users please call
                      1-800-451-7985.

                                                                        http://dor.wa.gov


                                                                                                  FS0008 4/01

								
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